The firm blamed the rising number of failed sales on buyers and sellers getting cold feet, the elimination of Home Information Packs and economic uncertainty, according to The Guardian.
Sellers withdrawing properties from the market accounted for 29% of the total sales that fell through, said the firm, with the phasing out of Home Information Packs (HIPs) also a factor, as sellers feel less financially obligated to the sale.
HM Revenue & Customs figures show 173,000 house sales in the UK in Q1, well down on the 459,000 recorded in the last quarter of 2006 when the housing market was nearing its peak.
The second most common reason sales fail remains buyers pulling out of the purchase, driven by nervousness in the marketplace about house prices and fuelled by fears over finances, general economic uncertainty and job security.
However, fewer transactions failed because buyers couldn’t get a mortgage, said the law firm, with just one in 10 sales collapsing for that reason this year, down from 15% in 2009. Buyers have understood they need to look for financing before they start house hunting, it added.
Collapsed chains account for 9% of failed sales, poor surveys for 8% and sellers deciding to rent instead of sell for 6% of all abandoned sales.
Mark Montgomery, the 1st Property Lawyers commercial director, said real world factors like family sizes, schooling and personal circumstance drive the market, causing more sellers to sit tight and watch how the situation develops.
“Expectations have not always been met,” he added. “Modest price rises after the initial post-credit crisis fall raised the hopes of property-owners regarding what they might get on the market. This unrealistic idea of property values was reflected in the number of sellers aborting transactions once they realised they wouldn’t be getting what they wanted.”
